Course:ECON372/OK2019WT2/Topic16
Economics of Agriculture
Group #1
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 0 | |
| Article Relevance (10) | 0 | |
| Summary (20) | 0 | |
| Course Related Analysis (30-50) | 0 | |
| Extended Analysis (0-20) | ||
| Presentation (10) | 0 | |
| Total | 0 |
Group #2
Summary
Recently, the outbreak of desert locusts in East Africa has destroyed crops and threatened agriculture in the region. It is reported that a swarm of locusts can consume the same amount of food in one day as about 35,000 people, posing a serious threat to both crops and grazing land. Millions of people in the region rely on agriculture and livestock for survival. Unfortunately, the worst of the outbreak is yet to come as the number of desert locusts will increase to 400 billion by June, leading to a looming catastrophe. Soon the locusts will form the next generation and this will coincide with the planting season that is about to start. Farmers will not be able to plant and have to delay harvests, causing an unprecedented threat to food security and livelihood in the region.
Analysis
This article relates to the chapter by demonstrating how food security is affected by climate change. The wetter and hotter weather than usual has provided locust eggs with ideal conditions to hatch and grow in East Africa. The continuing outbreak of the desert locusts in the region is causing insecurity to the food supply. Effective monitoring and precautions have to be taken immediately in order to minimise the impact of the coming plague.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 20 | |
| Course Related Analysis (30-50) | 20 | What does it mean to be efficient when things like locust outbreaks can happen? This is a type of crop failure risk. How can this risk be managed? What role can markets play? |
| Extended Analysis (0-20) | ||
| Presentation (10) | 8 | |
| Total | 68 |
Group #3
https://hbr.org/2016/04/global-demand-for-food-is-rising-can-we-meet-it
Summary
Journalists Maarten Elferink andFlorian Schierhorn pointed out in “Global Demand for Food Is Rising. Can We Meet It?” that the world's population is in the stage of explosive growth, the demand for global food has also increased dramatically, by 2050, the demand for food is expected to double. In order to meet food demand, the journalists pointed out that there are two ways to increase crop yield: increase the area of agricultural land or improve the overall level of farming. The former often incurs high external costs, irreparable damage to the natural environment and species diversity, and is extremely inefficient. Therefore, the authors focus this article on improving integration in the supply chain.
With climate change, especially global warming and extreme weather, food production in some tropical regions near the equator is expected to fall by 18% to 23% by 2050 because of water shortages. Fortunately, some countries and regions near the poles, especially Russia, which has the largest area of land in the northern hemisphere, will have more favorable farming conditions and temperatures, and therefore huge production potential. Because of the differences of productivity among the nations, enterprises and governments must work together to encourage innovation and improve supply chains to achieve a sustainable global food balance.
In short, as the authors put it, "Global policy makers, corporations, and consumers must put the global food balance higher up the agenda."
Analysis
We known from the textbook that Malthus said 200 years ago that population growth would inevitably outstrip productivity growth, leading to widespread famine. Although food production is still plentiful today, it is worth noting that government regulations and low profit margins for growers stifle farmer innovation, thus limiting the ability of new, thoughtful thinkers to join the industry or of current farmers to test new methods. Some countries lack economic incentives to encourage farmers to innovate, and public funding for basic research and the application of research to agricultural practices has actually decreased, further discouraging farmers from adopting sustainable farming practices. A historically rare plague of locusts that swept through East Africa and Eurasia in early 2020 has added to the economic pressure on local farmers, causing unpredictable damage to the world's food supply. Therefore, large companies with social corporate responsibility and governments with a long-term vision should shoulder the responsibility of reducing the damage to the natural environment caused by agricultural emissions and the balance of the global food supply. For example, encouraging developing countries to increase investment in agriculture and increase food production by improving technology or changing farming practices; In the policy relaxed to the farmer's loan restriction, provides the reliable backing for the agricultural development. At the same time, large agricultural multinationals can mitigate global food production imbalances through advanced logistics, storage and processing capabilities and guidance to farmers on effective ways to use agricultural land.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 20 | |
| Course Related Analysis (30-50) | 40 | |
| Extended Analysis (0-20) | ||
| Presentation (10) | 9 | |
| Total | 89 |
Group #4
Ukraine's Ban on Selling Farmland is Choking the Economy Summary:
James M Gomez and Kateryna Choursina reports to Bloomberg Businessweek on the development of the agricultural sector in Ukraine, given the enduring legacy of the Soviet Union. Primarily, the article stresses concern from an economic perspective where the government’s reluctancy to adopt new land reforms are hindering further investment and growth of the industry. Gomez and Choursina explores why motives for this reluctancy despite pressure from the International Monetary Fund and companies such as Mriya Agro to lift the ban on selling farmland. To emphasize the scale of the debate, the authors briefly include data on Ukraine’s dependency on farming as “its people have lived, toiled, and starved on the land for centuries, and their economic and political struggles are dug deep into the soil.” This follows with a reminder of the 6 million Ukrainians who perished in the 1932-33 famine as a result of Stalin’s collectivization. The importance of the article is given by highlighting that about 40 percent of total exports are in agriculture and although they are among the world’s top producers of sunflower oil, barely, wheat and corn; their crops are among the lowest in Europe, signaling its huge potential.
As the Ukrainian parliament voted to “extend the moratorium” the article is arguing that the current laws which prohibit local nationals from selling the land is damaging this unexplored potential which could benefit the growth of the country’s GDP as a whole. The authors also here remark that Ukraine’s “economy continues to lag such other former communist countries as neighboring Romania and Poland”; causing an increasing popular opinion to push the reforms through. To further their point, the authors also include reports from the World Bank saying that “farm productivity and yields in Ukraine are a fraction of what they are in other European countries, blaming the land law.” Additional evidence presented includes a statement from Uriy Kosyuk, CEO of Myronocskiy Hleboproduct SA, claiming that “given the present level of grain prices, the cost of leasing land, and the headache associated with extending lease agreements, it’s very expensive to expand the areas we farm.”
Finally, among the chief concerns regarding the exploitation of agriculture for economic growth is the institutional corruption that remain from fall of the Soviet Union. The article presents evidence of this from the Transparency International’s corruption index which shows Ukraine is “down four notches from 2013”.
Analysis:
Although this article is written from a purely capitalistic perspective, it does raise a number of critical issues in our approaches of extracting and conserving our agricultural resources. As noted in the textbook, since the fall of the Soviet Union in 1989, the former member nations have worked, to a greater or lesser degree, toward a return to an owner-operator type of agricultural production and distribution. This article highlights the issues in working towards such a system when local government is not willing to surrender any and all forms of governance over the area. By allowing locals to sell farmland and for investors to freely develop the land for the purpose of economic profit brings countless of new issues that eventually becomes the problem of government. Issues like pollution as a result of the development poses increased concerns around climate change. Further concerns could erupt regarding competition in the industry as large companies such as Myronocskiy Hleboproduct who could potentially outcompete local business.
The article primarily concerns the current situation of one single country, but it is apparent how its consequences are global and could affect a large portion of the countries whom Ukraine export to. A country like Canada would most likely not be affected to any noticeable degree but could see their market share diminish if larger companies are able to exploit the full potential of Ukraine’s farmland. Furthermore, it explores the difference in local policy in different countries as to how we best sustain our natural resources, showing the obvious, globally encompassing problem, that no-one as of yet have a definitive course of action that best benefit all.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 8 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 20 | |
| Course Related Analysis (30-50) | 45 | The issue for farmers is security of tenure, not ownership. To invest, you need to know that you will get the return from the investment. This does not require ownership of the land. In Ukraine, with institution problems, it isn't clear that it can effectively support an efficient land market. |
| Extended Analysis (0-20) | ||
| Presentation (10) | 10 | |
| Total | 93 |
Group #5
https://www.foodbusinessnews.net/articles/14575-agriculture-trade-expected-to-boost-ag-industry
Summary:
“Agriculture is the solution that can feed a growing planet,” U.S. Deputy Secretary of Agriculture Stephen Censky
By 2050, the world population is predicted to be 10 billion and all have to be provided with viable amounts of food to live. Increasing agriculture innovation and production is essentially the answer to providing sustainable food to the planet. The U.S. Deputy Secretary of Agriculture Stephen Censky states that the U.S. has the most productive farmers worldwide that are currently and continuing to discover new products and manufacturing technologies with the $3 billion budget dedicated to agricultural research; the budget is meant for farming projects that will make a positive economic difference to farmers. With this budget, the public agriculture sector wishes to join with the private production and technology sector to further push research and marketing through other streamlines to increase awareness of this potential issue.
In addition, the use of biofuels significantly assists with the production of higher output levels. Using biofuels yields various benefits for the economy; it generates demand for the produce being grown, biofuels creates more jobs in communities supported by this type of production, they establish energy security and lastly they benefit the environment as the use of biofuels cultivates a more “positive greenhouse gas profile”. As the U.S. agriculture exports produced an additional $179 billion to the economy and supports 1.1 million jobs, the U.S.D.A is seeking to continue the growth by expanding to global markets such as Japan, China, and India to increase and sustain the production flow worldwide. The goal for the U.S is to have an agriculture trade agreement with China in 2020 to maintain a market for farmers products.
Analysis:
The article in question relates heavily to the topics discussed in chapter 16 of our textbook. One of the main takeaways from the beginning of the article is the introduction of biofuels into the agriculture industry. Biofuels can directly impact the industry as farmers can grow the necessary products to create this fuel and use said fuel in their processes to cut down on emissions and recycle their products. This increase of research budgets discussed within the article can in fact help grow the industry by investing further in biofuels. This relates to the section of the chapter titled “Food Security in a Time of Climate Change”, it discusses how the industry will need to increase production by approximately 35% due to increasing population. By raising the supply and demand for biofuel, the agricultural industry can possibly produce the profits needed to grow to meet this new level of future demand. The decrease of emissions over time will also have a positive impact on the ecosystem, which can lead to improved crop yields and further economic growth. The increase of biofuel technology can lead to improvements of many different aspects in multiple industries, creating cleaner energy, while growing the agriculture industry in the process.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 20 | |
| Course Related Analysis (30-50) | 35 | A big emphasis in the article is on exports, and trade agreements. Trade should follow comparative advantage, and the USA has a comparative advantage in agriculture. So, success for agriculture is dependent on access to international markets. Note also mention of subsidies, which are distoring market. |
| Extended Analysis (0-20) | ||
| Presentation (10) | 10 | |
| Total | 85 |
Group #6
Summary:
Climate change will mean a hotter and wetter environment in eastern North America, and the frequent of extreme weather events is expected to increase. According to Researcher Evan Fraser’s words, using genetic manipulation can make crops and livestock hardier and more tolerant to extreme events, and he states that consumers demand cheap food produced by industrial methods. Fraser also talks about the story of wine making in France since the 1980s. As the temperature in Alsace rises and the rainfall levels drop, grapes become more susceptible to disease, and the harvest arrives much earlier. Some cooler climate grapes are no longer grown and varieties from the southern France can now be grown in Alsace as well. Fraser states that what the farmers need to do to grow their crops after the climate change can be very different comparing to the ways they do it before, and this change can be very abrupt. In Nova Scotia, a late frost in June 2018 damaged all the grapes and berries, and the estimated damage was $34 million. In 2019, mould or mildew caused by wet weather became a problem to agricultural industry in Nova Scotia. However, Swiss-born Nova Scotia wine pioneer Hanspeter Stutz states that the window to ripen grapes is getting wider in Nova Scotia and this change is more on a profitable side.
Analysis:
Technology and weather are two main factors are affect agriculture. This news is more force on how the weather affect the grape. During a bad weather, farmer will have a decline on production of food, which will give a decrease on food available for consumption based on the formula--- Food available for consumption=Food produced locally+Net food imports- Food wasted. Generally, net imports are zero, so food local production become more significant for total consumption. In the future, increasingly frequent extreme weather events are going to give a destroy for farming, therefore, people need to be support better technology and better government police to engage farmer, such as price supports(price-based loans) and supply restrictions. Consumers demand cheap food is mentioned in the news, which means people very care about the price of food and food is the foundation of a country.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 14 | |
| Course Related Analysis (30-50) | 30 | The article talks about increasing risk, and increasing opportunities. Farmers need to adapt to reduce risk, and to take advantage of new opportunities. Are government programs up to the task? |
| Extended Analysis (0-20) | ||
| Presentation (10) | 6 | |
| Total | 70 |
Group #7
Summary: A 2019 article written by The Conversation Academic Journalism Society depicts how South Africa's agricultural industry is under pressure from climate change. Specifically, global warming prompts a widespread unpredictability regarding the countries rain patterns. Irregular or infrequent exposure to wet conditions effects not only the physical growth of the crops' but also the phenological growth (certain levels of heat, moisture and sunlight). Rainfall patterns are difficult to analyze, and as a result, South Africa are facing longer dry spells which inevitably effects the availability of water and the yield of crops. The impacts on the agriculture industry and the food supply of South Africa are evident, in order to remedy these repercussions, concentrated efforts from the government, financial institutions and agri-business representatives must be established. South Africa operates within a duel agriculture economy consisting of commercial farmers (87%) and small-scale farmers (13%). The predominant challenges facing smallholder produces are inadequate financial support, a lack of access to water and poor infrastructure. In order for these producers to grow and contribute to a greater extent while adapting to the climate changes, the article proposes these solutions: Reassess marginal crops - transitioning to crops less susceptible to drought conditions. Select appropriate seed cultivators for the forecasted season - different seed cultivators may be designed for certain growing conditions. Diversity farm operations - consider eco-tourism on farms or high-value crops. Use conservation agriculture techniques - minimal or no till methods or intercropping. Ecologically beneficial combination of crops and livestock to balance the soil impacts. Lastly, to cooperate with other farmers, academics and agricultural organizations to keep up with the latest industry changes.
Analysis: This article discusses several key topics used throughout chapter 16 of the textbook. Specifically, the impacts of climate change, government subsidies, soil preservation and food production in the short and long term. With regards to climate change, analysis must revolve around the equation that determines food security: Food available = food produced locally + net food import - food wasted. In South Africa's situation, the most valued crops (wheat and maize), can not be produced efficiently enough to support the countries consumption. To maintain balance, net imports must increase; fresh fruit and wine are South Africas, most tradable commodities on the global scale. An increase in production of these commodities (potentially influenced by government subsidies) may assist in offsetting the impact felt from not being able to produce enough food locally. However, water availability still poses a significant constraint. Drip irrigation, and other less water wasteful innovations must be implemented in order to sustain this increased level of production. Particular attention must also be placed on the trade off between short-term and long-term soil impacts. Soil productivity is viewed as a renewable resource and with proper management, it may be sustained for several future periods. Global warming can be viewed as a short and long term constraint. In the short-term, yearly crop yields decrease and farmers are faced with the opportunity cost whether to increase their production with more severe implications on the soil or to reduce harvests and maintain the soils quality for future years. Analysis must be conducted to determine the efficient level of productivity that farmers should produce in normal circumstances and additionally, an analysis that incorporates the short-term pressure of a food shortage. This extended analysis will provide clarification for how much to sustainably produce in this period without completely jeopardizing future growing seasons that may be enhanced through future technological changes.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 20 | |
| Course Related Analysis (30-50) | 40 | A key issue that articles such as this don't spend much time on is the things that will influence the decisions of individual farmers. If farmers are not already changing crops or adopting new technologies, what are the barriers? One is probably that these alternatives are not profitable. If the societal benefits - food security, etc. - then policy change may be required to support the changes. What types of policies? |
| Extended Analysis (0-20) | ||
| Presentation (10) | 10 | |
| Total | 90 |
Group #8
https://guardian.ng/features/agro-care/soil-fertility-decline-threatens-food-sufficiency/
Summary:
This article written by Gbenga Akinfenwa focuses on Nigeria and their soil fertility. It discusses the need for soil testing facilities in order for farmers to increase their soil fertilization and increase their crop results. Nigeria has been reported to have one of the highest declines in soil fertility. This decline has resulted in the need for more fertilizer in order to grow crops. The country does not receive adequate nutrient replenishment which is a big issue and is hard to resolve. Nigeria’s Federal Ministry of Agriculture proposed digital soil tests for farmers nationwide. This was mentioned but since then nothing has taken place or been discussed again. It is difficult for small farmers to get their soil analysed in order to make improvements as there are not many soil labs available. Most soil testing facilities are private making it hard for small farmers with inefficient funds to get testing done. Due to Nigeria’s the lack of agriculture funding by the government it does not look like there are any plans to increase the number of testing facilities in the near future either.
Analysis:
This article directly relates to chapter 16 and agriculture economics in a number of ways. Soil productivity and fertilizer inputs is an important part of the chapter and also what this article is all about. The article talks about the bad soil fertility In Nigeria and the need to increase it in order for the industry to improve. This relates to the chapter talking about the need for good soil productivity in order to improve the agriculture industry economics. In order for farmers to do this they need fertilizers, but they are not aware of how much they need in order to make their output maximized. This is directly due to the lack of Nigeria’s governments agriculture support. Agriculture support is also a talked about in the chapter as it is important in maximizing food production and farm income. This article clearly shows the lack of agriculture support in Nigeria as they are doing very little to help farmers increase their soil fertility. They could build soil testing labs that are accessible to small farmers or produce the digital testing kits as talked about, but they have done nothing because of their lack of funding. Funding for Nigeria’s agriculture sector is a major problem and because of that they have no income support which is talked about in chapter 16 as being a big help for a countries agriculture industry.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 20 | |
| Course Related Analysis (30-50) | 25 | In economics we focus on the decision maker. One issue talked about here is lack of information available to small holders. Another is externalities from incorrect use of fertilizer. What are the incentives governing the decisions to invest in soil fertility? How secure is land tenure? If subsistence farmers are struggling to survive for one year, will they invest in enhancing soil fertility, which typically means lower yields this year? |
| Extended Analysis (0-20) | ||
| Presentation (10) | 10 | |
| Total | 75 |